Who's to say we aren't already?
As far as game lore goes, we've had mortal armies go in and slay the husk of C'thun and Yogg-Saron, all mortals that have previously come into contact with these figures have gone "insane". The entirety of MoP has been heavily focused around mortal armies (Horde or Alliance) learning to deal with the influences of Y'Shaarj and defeat his "last breaths", something not even the Shado-Pan in all of its millennia of existence could accomplish. Either for all intents and purposes the player characters are immovable objects of sanity and morals, or they're already insane, and insanity does make the best insulation to other forms of insanity. The members of the "mortal" armies show no qualm with being agents of genocide for a few pieces of silver or gold, carrying around tokens of their kill, constantly changes stances of who they will help or kill. They're completely tolerant of killing one another, even on same faction lines, and are almost compulsively drawn to circumstances that will most likely result in their death. That's in no means the recipe for heroism or valor, that's the recipe for a straight jacket and a padded room.

As towards the topic of the thread itself.
I'm liking the idea that Ny'alotha is a city built around N'zoth, or at least a doorway to where N'zoth sleeps. The city could be in a chamber similar to the one the Aspects used to convene in prior to the Sundering, that may have fractured slightly in the Sundering, and opened completely in the Cataclysm. The black forest could refer to things like sulfur vents that we saw in Vash'jir or something like what we saw in the Emerald Nightmare (Stormrage book). I would also be both surprised and unsurprised at the same time if we were told that the Titans didn't create the Emerald Dream, but merely built upon it, and all of the layers within the dream actually exist as barriers to contain N'zoth. Also opening up the possibility that the Dragon Aspects weren't actually empowered to prevent the Hour of Twilight, because if that were the case it was a self-perpetuated disaster, but to be unknowing lookouts towards certain Old Gods or ways that they may try to release themselves.

Interesting. I would love to see a new city, Guess we'll find out at blizzcon.

Hey. Here's an idea. Ny'alotha is the new neutral hub for the expansion. You just get some sweet debuff that stacks every ten minutes or so if you spend time there. Quests could involve mitigating the effect, but not necessarily.

I would like to note that Karazhan bleeds into Netherspace. Netherspace has a sleeping Nightbane and skeletal gryphons flying around in it.

The latter are both actually pieces of misinformation, I believe WoWwiki is responsible for them. Nightbane sleeps in the hills above the village (where he was blasted when Medivh killed him) while the gryphons are meant to circle the tower, again outside Netherspace. They just clip into it occasionally, which is why they can appear as though they're flying through the walls of the cave-like... whatever it is that Netherspace actually is.